Singapore’s annual budget announcement, which includes extra healthcare spending for the elderly and other handouts, has fed speculation that the government is gearing up for an election this year – and one name in particular being touted as the city-state’s next prime minister

Singapore’s Finance Minister Heng Swee Keat was appointed as the assistant secretary-general of the ruling People’s Action Party last November, a move that many consider to be a sign that he is in the running to be the country’s next Prime Minister. Wallace Woon / EPA-EFE

Singapore’s gift-packed budget has fuelled rumours that the People’s Action Party (PAP) is preparing to call an early election in the face of shrinking support for the ruling party.

Although polls are not set to be held until 2021, analysts suggest they could take place later this year, as the country’s founding family prepares to hand over leadership to a younger generation of leaders.

Ja Ian Chong, deputy head of political science at the National University of Singapore, told Southeast Asia Globe that the government might be feeling pressured to act early due to fears about the ruling party’s declining popularity.

“Some observers have said that [the People’s Action Party] could be concerned about an erosion to its support due to recent data breaches, cyber attacks, and the spate of deaths in the military, so if there is a fear that support will be going away, having an earlier election might make sense,” he said.

“There is little chance the PAP will lose office, but they would like to be able to demonstrate that they have a stronger rather than a weaker mandate.”

One member of the city-state’s so-called fourth generation of leaders who has been tipped to eventually take over from Prime Minister Lee Hsien Loong is finance minister Heng Swee Keat.

Chong saidthat the finance minister – who announced the budget on Monday – remained something of a faceless man to the public.

“At the very least, there doesn’t seem to be strong [public] opposition or strong dislike to [Heng], as opposed to some of other names that have been raised,” he said.

“I think he is the most innocuous of the possible candidates. So that’s probably why Swee Keat is being moved in… It does seem that Heng is being given the mantle, so it’s his position to lose,” he said.

In this year’s budget, Heng set aside Sg$6.1 billion ($4.5 billion) to support half a million citizens aged between 60 and 69.

The package included concessions for government-built sports facilities to keep healthy as well as healthcare and insurance subsidies.

Heng described the package as “a gesture of our nation’s gratitude for their contributions and a way to show care for them in their silver years”.

Another Sg$3.1 billion ($2.3 billion) was earmarked for long-term care needs, including subsidies and payouts for severely disabled workers.

To mark the 200-year anniversary of Sir Stamford Raffles’s founding of modern Singapore, Heng unveiled further handouts of Sg$1.1 billion.

Around 1.4 million lower-income citizens – more than a quarter of the city-state’s population – will receive up to Sg$300 dollars each in vouchers to help them with living costs.

Others will get benefits in the form of pension fund top-ups, tax rebates and support for their children’s education.

All the benefits packed into the budget have increased speculation that the government is going to call an election this year, with observers citing previous election years such as 2011 and 2015 when the government announced big-spending budgets in the lead-up to the polls.

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However, a clause in Singapore’s constitution states that the government must balance its books during its time in office, and with a large surplus still remaining, it may be that this budget is not the last of Lee’s tenure.

If Heng if to take over from Lee, who is the son of the late founding premier Lee Kuan Yew and has been in power since 2004, the finance minister showed no sign of it while announcing the budget.

“The thing about Heng is that he is a little bit of an unknown, in the sense that there is no real signature policy attached to him that comes to mind,” Chong said.

“Maybe that’s a good thing electorally, but in terms of his ability to create an imprint on policy in the sense of a direction that Singapore needs to go in, [that] remains up in the air.”